Health Care Watch: May 27, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from May 18 – May 24. Where available, hyperlinks are included to the relevant documents. Please let us know if you have any questions or would like additional information on the items below.
LEGISLATIVE UPDATE
House
On May 18, the Budget Committee voted 17-16, with four Republican members voting “present,” to advance the House committees’ budget reconciliation policies, including legislation that would reduce Medicaid spending. On May 22, the House voted 215-214 to advance the package, the One Big Beautiful Bill Act. Prior to House passage, the Rules Committee advanced the package to the House floor with a 45-page amendment to the bill that included various provisions to appease Republican moderate and conservative holdouts. The package includes various changes from initial language, such as triggering work requirements for Medicaid recipients by the end of 2026 instead of 2029 and increasing the cap on state and local tax (SALT) deduction from the bill’s $30,000 threshold to $40,000 (current law is $10,000). The bill now heads to the Senate, where changes are expected. Senate Majority Leader John Thune (R-SD) has targeted July 4 for the Senate to have completed consideration of its bill. However, President Trump has asked that both chambers pass identical legislation by July 4, an unlikely proposition. A unified bill is more likely to pass both chambers, in identical form, by the August recess.
On May 21, Appropriations Committee Chairman Tom Cole (R-OK) stated that he plans to move ahead with fiscal year (FY) 2026 funding bills after the House passes its reconciliation package. Chairman Cole stated that the bills must be passed before August recess, noting that some may need to be brought to the House floor in June or July.
On May 21, Rep. Gerry Connolly (D-VA) passed away. Rep. Connolly served in Congress for 16 years.
Senate
On May 20, the Appropriations Labor, Health & Human Services, Education, and Related Agencies Subcommittee held a hearing entitled A Review of the President’s Fiscal Year 2026 Budget Request for the Department of Health & Human Services (HHS). HHS Secretary Robert F. Kennedy, Jr. testified and members discussed various topics including NIH research funding cuts, rural health care, artificial intelligence, drug pricing, and potential cuts to the Medicaid program
On May 22, the Appropriations Committee held a hearing entitled A Review of the President’s Fiscal Year 2026 Budget Request for the Food and Drug Administration (FDA). FDA Commissioner Marty Makary testified before the Committee where he faced questions from Democrats and Republicans on the impact of the Administration’s staffing cuts and their downstream effects.
REGULATORY UPDATE
On May 16, the Food & Drug Administration (FDA) granted Novavax full approval for its protein-based and non-messenger RNA COVID-19 vaccine. The agency approved the vaccine for use only in people 65 and older or for those ages 12 to 64 who have at least one underlying condition.
On May 19, the Centers for Medicare & Medicaid Services (CMS) announced that the Health Care Payment Learning & Action Network (HCPLAN) will resume its efforts to improve health care quality and outcomes while reducing health care costs through alternative payment models (APMs). In the coming months, HCPLAN will launch four new initiatives focused on health care choice and competition, patient empowerment, preventative care, and technology-enabled health care. These initiatives align with the Center for Medicare and Medicaid Innovation’s (CMMI) new Make America Healthy Again strategy.
On May 20, FDA announced that it will only recommend COVID-19 vaccines for adults 65 and older and people at risk for severe illness. FDA will require manufacturers to conduct clinical trials demonstrating the efficacy of COVID-19 vaccines for healthy children and adults under age 65. FDA Commissioner Martin Makary and Director of the FDA's Center for Biologics Evaluation and Research Vinay Prasad stated that the move aligns the United States with other high-income nations that have limited vaccine access to older and vulnerable populations.
On May 20, HHS announced that it is taking immediate steps to implement President Trump’s Executive Order (EO) on Delivering Most-Favored-Nation (MFN) Prescription Drug Pricing to American Patients. The Department has identified specific targets pharmaceutical manufacturers are expected to meet to satisfy the requirements of the EO. HHS expects each manufacturer to commit to aligning U.S. pricing for all brand products across all markets that do not currently have generic or biosimilar competition with the lowest price of a set of economic peer countries. The MFN target price will be the lowest price in an OECD country with a GDP per capita of at least 60% of the U.S. GDP per capita.
On May 20, FDA announced steps to help state importation programs provide safe, effective and more affordable drugs as part of its efforts to implement President Trump’s EO on lowering drug prices. Specifically, the agency announced enhancements to the pathway under section 804 of the Federal Food, Drug and Cosmetic Act that allows states and Indian tribes to import certain prescription drugs from Canada. The agency will offer individual states and tribes the opportunity to submit a draft proposal for pre-review and meet with the agency to obtain initial feedback from FDA prior to formally submitting their section 804 importation program (SIP) proposal.
On May 20, during the 78th World Health Assembly, HHS Secretary Kennedy articulated the Trump Administration’s decision that it fully intends to withdraw from the World Health Organization (WHO).
On May 21, CMS announced a significant expansion of its auditing efforts for Medicare Advantage (MA) plans. Beginning immediately, CMS will audit all eligible MA contracts for each payment year in all newly initiated audits and invest additional resources to expedite the completion of audits for payment years 2018 through 2024
On May 22, HHS and the Departments of Labor and Treasury jointly issued a Request for Information (RFI) seeking public input on how to improve prescription drug price transparency. The RFI seeks input regarding the prescription drug price disclosure requirements, including information on existing prescription drug file data elements and information on implementation generally, such as the ability of health plans to access necessary data for reporting, as well as state approaches and innovation. The agencies also released updated guidance for health plans and issuers that sets a clear applicability date for publishing an enhanced technical format for disclosures.
WHITE HOUSE
On May 22, President Trump and the Make America Healthy Again (MAHA) Commission released the MAHA Report: Making Our Children Healthy Again Assessment. The report seeks to unpack the potential dietary, behavioral, medical, and environmental factors behind the declining health of American children and examines four primary drivers: 1) the shift to ultra-processed food; 2) the cumulative load of chemicals in the environment; 3) the crisis of childhood behavior in the digital age; and 4) the over medicalization of children. The report details each driver and its causes and concludes by providing next steps. The report provides the following research initiatives to consider as next steps: addressing the replication crisis, post-marketing surveillance, real-world data platform, AI-powered surveillance, GRAS oversight reform, large-scale lifestyle interventions, drug safety research, alternative testing models, and precision toxicology.
A list of all administrative and health care-related EOs can be found here. FHP Strategies will update this document, as needed.
HEARINGS
Senate
Judiciary Committee
June 4; 10:00 AM; 430 Dirksen
Reauthorization of the Over-the-Counter Monograph Drug User Fee Program
Witness: Dr. Jacqueline Corrigan-Curay, Acting Director, Center for Drug Evaluation and Research, FDA
House
Appropriations Committee
Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies
June 5; 10:30 AM
Markup of FY26 Agriculture, rural Development, Food and Drug Administration, and Related Agencies
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
CY 2026 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates (CMS-1834); Proposed Rule; 4/21/25
CY 2026 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System and Quality Incentive Program (CMS-1830); Proposed Rule; 4/24/25
CY 2026 Home Health Prospective Payment System Rate and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Bidding Program Updates (CMS-1828); Proposed Rule; 4/25/25
CY 2026 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1832); Proposed Rule; 4/25/25
Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability (CMS-9884); Final Rule; 5/2/25
REPORTS
Congressional Budget Office (CBO)
On May 20, CBO released preliminary analysis of the distributional effects of the One Big Beautiful Bill Act. CBO found that the total effects for the 2026–2034 period include the following: 1) an increase in the federal deficit of $3.8 trillion attributable to tax changes, including extending provisions of the 2017 tax act; 2) $698 billion less in federal subsidies from changes to the Medicaid program; 3) $267 billion less in federal spending for SNAP; 4) $64 billion less in spending, on net, for all other purposes; and 5) $78 billion in additional state spending, on net, accounting for changes in state contributions to SNAP and Medicaid and for state tax and spending policies necessary to finance additional spending
Office of Inspector General (OIG)
On May 22, OIG released a report examining HHS’ compliance with the Payment Integrity Information Act of 2019 (PIIA). OIG found that that HHS met many requirements but did not fully comply with PIIA. OIG determined that: 1) HHS did not conduct improper payment risk assessments for each program with annual outlays greater than $10 million at least once every three years; 2) HHS did not report an improper and unknown payment estimate for Temporary Assistance for Needy Families; 3) HHS included six of the States reviewed in FY 2024 in the error rate calculation for the Foster Care program, which does not represent a statistically valid process; 4) HHS reported improper and unknown payment rates in excess of 10% for the Head Start program; 5) HHS had recovery audit activities for the identified improper payments for the MA program that were delayed or missing cost-effectiveness documentation; 6) HHS reported a partial improper payment error rate for Advance Premium Tax Credit program; 7) HHS did not effectively demonstrate improvements to payment integrity for the Medicare Fee-for-Service program; and 8) HHS’ Sampling and Estimation Methodology Plan did not completely measure all key characteristics of the Uninsured Program.
ADDITIONAL POLICY NEWS
On May 21, Cigna Group announced that it will cap out-of-pocket costs at $200 per month for patients using the weight-loss drugs Wegovy and Zepbound through an add-on to its pharmacy benefit management plans.